In the Belly of the Curve

Mar 1, 2002

Peru ended its 74-year absence from the international bond
markets in February when it issued $1.43 billion worth of
10-year global bonds in a well-received deal that included a
Brady exchange. The issue made the most of improving sentiment
towards Peru, where the government of President Alejandro
Toledo has shown signs of hitting its stride after a difficult
and contentious first six months in office.
Prior to the deal, both Moody's and Standard&Poor's raised
their outlook for Peru and the government also concluded a $316
million stand-by agreement with the International Monetary
Fund.

The BB-/Ba3 rated sovereign was keen to go to the markets
after its Brady spreads narrowed to historic lows of well below
500 basis points. Pedro-Pablo Kuczynski, the former investment
banker now at the helm of the country's economy and finance
ministry, also made the case that Peru needed "to diversify its
credit sources" away from...